Legal Questions

This is a pretty wide topic, as there is no set list of open licenses. In fact, a license a publisher might use is just an open-ended contract which may have all sorts of rules. What this means is that nothing prevents you from defining your own "open" license that works the way you want, and naming it the "Trammell Open License" or whatever. The reason for why people use the established licensing schemes is because those have been vetted by legal professionals and they're known among the target audience of secondary publishers, which lowers the threshold for actually using the license. But in principle there are no general answers to how open licenses work, as there is an infinite number of possible open licenses.

That being said, the most common open licensing schemes I'm familiar with are OGL and Creative Commons. Here's what you do in practice to use them:

If you want to license your own material with OGL, you just put the OGL license text into your product, and describe somewhere therein clearly which parts of the material are "product identity" and which are open content the license concerns. The license then allows anybody to use the open content you've designated in the various ways allowed by the license text. OGL is viral, so if you want to use somebody's OGL material, you need to put the OGL license into your own work as well and designate any licensed materials as still within the license. In this latter case, when you're using somebody else's OGL material, you need to list your sources in the specific way described in the license: there is a place in the license text for a list of sources, which you need to fill with the similar lists from all the sources you've used yourself, creating a master list of original sources. That might sound a bit complex, but it's explained in detail in the license text itself.
If you want to license your game with a Creative Commons license, you first need to pick the license you want: there are several variants for different uses, such as commercial vs. non-commercial, which allows you to determine whether you want to allow others to make money off your work. After doing this, you need to simply reference the license in your work: unlike OGL, CC license does not have a defined way of including it, so you might get by without putting the whole license text into your product. I, for example, simply referenced the pertinent URL in mine last year, giving a link to the license text. CC license is not viral (in the basic form; there is a variant that is, I think), which means that whatever rights you give to the other guy in your license, they don't have to use the same license in their own work. It follows that if you want to use somebody else's CC-licensed work, you just need to follow the limitations of the license (such as attributing the other guy correctly in your own work), but won't need to mess about with the license yourself.

Regardless of the above options, also consider writing your own license. My personal favourite license is this, sometimes used by certain indie designers:

"Hey, if you want to create something based on my work, I want you to use my stuff! Contact me and we'll work something out."

You'll note that the above is not a license so much as an open statement of willingness to negotiate. It's a perfectly valid replacement for an open license that anybody can use; after all, if the other guy is serious, why wouldn't he tell you about his project?